example@gmail.com
+123 456 7891
Let's Talk

LMI Savings Guide in Australia

Lenders Mortgage Insurance (LMI) can add a high cost to your home loan, especially if you have a smaller deposit. This 2026 guide explains what LMI is, when it applies, and practical strategies to help you reduce or avoid paying it altogether while entering the property market sooner.

Request a Callback

"*" indicates required fields

Main Topics
See Your Limit
FAQS
Calculators
Get in Touch
Latest Articles

How Much Does LMI Actually Cost?

Indicative LMI premiums based on a $500,000 loan:

LVRDepositLMI Cost
85% LVR15% depositapproximately $6,000 to $7,500
90% LVR10% depositapproximately $10,000 to $12,500
95% LVR5% depositapproximately $15,000 to $19,000

LMI is typically capitalised into your loan rather than paid up front. With interest over 30 years, the true cost is significantly higher than the premium figure alone.

Use our LMI Calculator for your exact figure.

 

What Are the Best Ways to Save on LMI?

LMI is a common expense for many first-home buyers, but there are several ways to minimise or avoid it. According to the mortgage specialists at FS Loan, understanding your options early can save you thousands over the life of your loan.

Step 1: What Triggers Lenders Mortgage Insurance (LMI)?

LMI usually applies when your deposit is less than 20% of the property value, meaning your Loan-to-Value Ratio (LVR) is above 80%. It protects the lender—not the borrower—if the loan is not repaid.

Step 2: How Can I Avoid LMI With a Larger Deposit?

The most straightforward way to avoid LMI is by saving at least a 20% deposit. This reduces the lender’s risk and removes the need for insurance altogether.

Step 3: Can Government Schemes Help Me Skip LMI?

Yes, eligible buyers can access government-backed schemes like the First Home Guarantee, which allows you to purchase with a smaller deposit without paying LMI, as the government acts as a guarantor.

Save Thousands on Your Home Loan With Smarter LMI Planning

Lenders Mortgage Insurance (LMI) can significantly increase the cost of buying a home when your deposit is below 20%. FS Loan helps you understand how LMI works, when it applies, and how you may reduce or avoid it through smarter lending strategies and government support options.

Get A Free Assessment
Start A New Home Loan
Step 4: What Is a Guarantor Home Loan?

A guarantor loan allows a family member (usually parents) to use the equity in their property as security for your loan. This can reduce your LVR and help you avoid paying LMI even with a low deposit.

Step 5: Should I Pay LMI or Wait to Save More?

In some cases, paying LMI can help you enter the market sooner, especially if property prices are rising. It’s important to weigh the cost of LMI against potential long-term property growth and your personal financial situation.

Step 6: Can LMI Be Reduced or Capitalised?

Some lenders allow LMI to be added (capitalised) into your loan amount, so you don’t have to pay it upfront. While this makes entry easier, it increases your total loan and interest over time.

Step 7: Do You Qualify for a Professional LMI Waiver?

Eligible professionals may be able to borrow up to 90% LVR without paying LMI at all, through select lenders.

Professions that typically qualify:

  • Medical doctors and specialists
  • Dentists and dental specialists
  • Lawyers and solicitors
  • Accountants (CPA or CA qualified)
  • Engineers (chartered)

 

Eligibility criteria and maximum LVR limits vary by lender. A broker can identify which lenders offer waivers for your profession.

See also: No LMI Home Loans page. 

Start Your Free LMI Savings Check

Understand how Lenders Mortgage Insurance works and learn what may help you reduce or avoid this cost when buying a property.

Get A Free Assessment
  • Learn how LMI is typically charged when your deposit is below 20% and how it can add thousands of dollars to your total loan cost.
  • Understand the key strategies that may help avoid LMI, including government schemes, guarantor options, and professional lender policies.
  • Prepare your financial details early, including income, savings, and expenses, to understand your borrowing position more clearly.
  • Compare lenders and loan structures to find options that may reduce upfront costs and improve your long-term repayment outcomes.

How Much You Can Borrow for Your Home?

How much can you borrow

"*" indicates required fields

Step 1 of 4

This field is for validation purposes and should be left unchanged.

Frequently Asked Questions

The cost of LMI varies depending on your deposit size, loan amount, and lender policies. Generally, the smaller your deposit, the higher the LMI premium.

Take Control of Your Financial Journey with Our Home Loan Calculators

Your ideal home deserves a mortgage that aligns with your financial goals. Together, we can make it happen. 

Borrowing Capacity Calculator

Estimate your borrowing capacity based on income, expenses, and debts. See how much you can realistically borrow for your dream home.

Home Loan Repayments Calculator

Calculate your monthly repayments for different loan amounts and interest rates. Plan your budget and choose the best home loans Australia option.

Refinance Savings Calculator

Compare current loan versus refinancing options. See potential savings by switching to better rates or terms.

LMI Calculator

Estimate Lenders Mortgage Insurance (LMI) for high loan-to-value ratios. See how much you could save or need to pay upfront.

Stamp Duty Calculator

Calculate the stamp duty costs for your property purchase. Plan upfront expenses accurately when buying a home.

Explore More Calculators

Looking for more tools to plan your finances? Explore our full suite of calculators designed to help you make smarter home loan decisions.

Explore More Calculators
I Want To Buy
I Want To Refinance

Get in Touch

Get in Touch

"*" indicates required fields

Take A Look At Our Articles & Resources

Browse Articles

Ready To Save On Your Mortgage?

I Want To Purchase A Home
I Want To Refinance

Helping you find the right home loan with expert guidance and trusted support.

Quick Links
Home Loans
Home Loans
Useful Links
Contact

© 2026 All Rights Reserved.

Home Loans

Scenarios

Calculators

Guides

Updates

About Us

Contact Us